Goodyear boss calls for 'change' in tire industry

Crain News Service report

SINGAPORE (March 25, 2015) — Goodyear CEO Richard Kramer told attendees at the World Rubber Summit 2015 in Singapore that  a new generation of consumers is changing the tire industry's retail landscape.

During his March24 keynote address, Mr. Kramer described the tire industry as “a great industry to be in, both now and in the future.

“Many of the high-profile tech companies that got the headlines have come and gone, but the world still moves on rubber.”

Expressing optimism over the future of the global tire industry Mr. Kramer said “our industry is still here and I'm confident we'll be here for the long term.”

The growth of the middle class, especially in developing markets, will be a key driver for industry growth, according to Mr. Kramer.

“The continuing emergence of the middle class around the world and the love of mobility ingrained in the human spirit will lead to increased vehicle sales in emerging markets,” he said, adding that the development translated to tire volume growth for decades to come.

Mr. Kramer went on to say that in mature markets such as North America and Western Europe, growth was possible and driven by the changing mix to high-value-added tires.

According to the Goodyear boss, profitable segments — such as winter tires, SUV and light truck tires — could offer higher margins as informed consumers are willing to pay for these high-value-added tires.

Stressing the need for “change” in the industry, Mr. Kramer said the newest generation of consumers — dubbed Millennials — is changing the retail landscape for the industry.

“They have the leverage and are buying what they want, when they want, and how they want,” he said.

“Millennial consumers are not going to adapt to us and the way we've sold tires for the past 100 years. We have to become a fast-moving, consumer-driven, technology savvy industry.”

Mr. Kramer pointed out that the sale of tires will have to be a convenient and frictionless experience for the new consumers.